Bank of Hawaii Shares Fall 7.5% After Q3 Earnings Miss Estimates

Bank of Hawaii Corporation (NYSE:BOH) reported third-quarter 2026 adjusted earnings per share of $1.49, below analysts’ consensus estimate of $1.51, despite increases in net income, revenue and net interest income.

The bank’s shares declined 7.51% in pre-market trading on Monday following the earnings announcement.

Quarterly net income reached $64.3 million, representing an increase of 0.7% from the second quarter of 2026 and 20.5% compared with the corresponding period last year.

Revenue totalled $198.8 million, compared with $196.9 million in the preceding quarter and $182.6 million in the third quarter of 2025.

The results also showed a further expansion in net interest margin, alongside changes in loan balances, deposits and credit quality.

Net Interest Income Rises as Margin Expands

Bank of Hawaii reported third-quarter net interest income of $156.1 million, an increase of 1.6% from the previous quarter.

Net interest margin expanded by four basis points to 2.82%, marking the tenth consecutive quarter of improvement.

The net interest margin measures the difference between interest income generated from assets such as loans and securities and the cost of funding those assets, expressed relative to average interest-earning assets.

The bank attributed the continued expansion to the repricing of assets and adjustments to deposit pricing.

Jim Polk, President and Chief Executive Officer of Bank of Hawaii, commented on the quarterly performance.

“Bank of Hawaii delivered another quarter of solid performance, supported by continued expense discipline,” Polk said. “Net interest margin expanded for the tenth consecutive quarter, reflecting the ongoing benefit of asset repricing and the positive impact of deposit repricing actions.”

The improvement in net interest income contributed to the bank’s year-on-year revenue growth.

Quarterly Net Income Increases 20.5% Year on Year

Bank of Hawaii recorded net income of $64.3 million for the three months ended 30 September 2026.

The figure was 20.5% higher than in the third quarter of 2025 and represented a sequential increase of 0.7%.

Revenue rose to $198.8 million from $182.6 million a year earlier, an increase of approximately 8.9%.

Compared with the second quarter of 2026, revenue increased from $196.9 million.

Despite these improvements, adjusted earnings per share of $1.49 were two cents below the $1.51 expected by analysts.

The bank’s shares fell 7.51% in pre-market trading following the announcement. The reported share price movement occurred despite the increases in several quarterly financial measures.

Loan Portfolio Expands While Deposits Decline

Bank of Hawaii reported total loans and leases of $14.4 billion as of 30 September 2026.

This represented an increase of 2.1% compared with 31 December 2025.

The expansion indicates that the bank’s outstanding lending balances increased during the first nine months of the year.

Total deposits, meanwhile, declined by 3.3% over the same period to $20.5 billion.

The bank attributed the reduction primarily to the planned runoff of public funds and lower commercial deposit balances.

Public funds generally include deposits held by government entities, while commercial deposits relate to business customers.

Changes in deposit balances and funding costs can affect a bank’s net interest income and liquidity management.

Bank of Hawaii’s reported margin expansion occurred alongside the reduction in total deposits during the year.

Non-Performing Assets Increase Following Commercial Mortgage Classification

The bank reported an increase in non-performing assets during the third quarter.

Non-performing assets reached $43.4 million as of 30 September 2026, compared with $11.5 million at the end of June.

The $31.9 million increase was primarily attributable to a single commercial mortgage loan being placed on non-accrual status.

Non-accrual classification generally means a lender stops recognising interest income on a loan under its normal accrual accounting treatment because of uncertainty surrounding collection.

The change increased the bank’s reported non-performing asset balance during the quarter.

However, Bank of Hawaii’s provision for credit losses declined to $2.8 million from $3.6 million in the second quarter.

The provision represents an expense recognised to account for expected credit losses on loans and other applicable financial assets.

The increase in non-performing assets and the reduction in the quarterly credit loss provision reflect different measures of the bank’s credit portfolio and associated accounting estimates.

Bank of Hawaii Repurchases $20.2 Million in Shares

Bank of Hawaii continued its share repurchase programme during the third quarter.

The company repurchased approximately 256,000 shares for a total of $20.2 million.

Following the quarter, the board of directors approved an additional $200 million in share repurchase authorisation.

The increase brought the total remaining authorised amount to $268.7 million.

Share repurchase authorisations permit a company to buy back shares within the approved limit, although they do not require the entire amount to be used.

The timing and value of future repurchases will depend on management decisions, capital requirements and applicable regulatory considerations.

The board also declared a quarterly cash dividend of $0.70 per share.

The dividend represents an annualised rate of $2.80 per share if maintained at the same quarterly level.

Bank of Hawaii Financial Outlook

Bank of Hawaii’s third-quarter results showed higher net income, revenue and net interest income compared with the previous year, although adjusted earnings per share were below market expectations.

The bank reported its tenth consecutive quarterly improvement in net interest margin, which reached 2.82%.

Its loan portfolio expanded during the first nine months of 2026, while total deposits declined, partly reflecting the planned reduction of public funds.

Credit quality figures showed an increase in non-performing assets associated primarily with one commercial mortgage, while the provision for credit losses decreased sequentially.

The company also expanded its share repurchase authorisation and maintained its quarterly dividend at $0.70 per share.

Future financial results will reflect developments in lending activity, deposit balances, funding costs, credit quality and the bank’s capital allocation decisions.

Bank of Hawaii Corp stock price